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SIF
What is a ‘Simple Investment Fund – SIF‘
A SIF is a type of unsecured loan from investors that allows Fund Manager invest in real estate through property or mortgages and or major exchanges like a stock. SIFs provide investors with a fixed rate of return irrespective of the real estate ups and downs ensuring no risks to the investors. Investors receive tax considerations and high rate of returns.
REIF
What is a ‘Real Estate Investment Fund – REIF‘
A REIF is a type of security that will invest in real estate through property or mortgages and often trades on major exchanges like a stock. REITs provide investors with an extremely liquid stake in real estate. They receive special tax considerations and typically offer high dividend yields.
Breaking Down
REIFs, an investment vehicle for real estate that is comparable to a mutual fund, allowing both small and large investors to acquire ownership in real estate ventures, own and in some cases operate commercial properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels and shopping malls.
Equity REIF
Equity REIFs invest in and own properties, that is, they are responsible for the equity or value of their real estate assets. Their revenues come principally from leasing space—such as in an office building—to tenants. They then distribute the rents they’ve received as dividends to shareholders. Equity REIFs may sell property holdings, in which case this capital appreciation is reflected in dividends. Equity REIFs account for the vast majority of REIFs.
Hybrid REIFs
Hybrid REIFs invest in both properties and mortgages. Individuals can invest in REIFs either by purchasing their shares directly on an open exchange or by investing in a mutual fund that specializes in public real estate. Some REIFs are SEC-registered and public, but not listed on an exchange; others are private.
Mortgage REIFs
Mortgage REIFs invest in and own property mortgages. These REIFs loan money for mortgages to real estate owners, or purchase existing mortgages or mortgage-backed securities. Their earnings are generated primarily by the net interest margin, the spread between the interest they earn on mortgage loans and the cost of funding these loans. This model is potentially sensitive to interest rate increases. In general, mortgage REITs are less highly leveraged than other commercial mortgage lenders, using a relatively higher ratio of equity to debt to fund themselves.
